Trade Union Political Funds and Political Party Funding

Baroness Drake Excerpts

Wednesday 9th March 2016 Lords Chamber

[Baroness Drake (Lab)]

My Lords, I, too, was a member of the committee, and when we started our task the Government insisted that Clauses 10 and 11 were concerned only with how union members choose to contribute to political funds and were not about party funding. That insistence meant that the Government made no assessment of their impact on Labour Party funding. The Government assumed as their main estimate that there would be no change in the number of union members contributing to political funds. That assumption was not supported by the evidence of other witnesses, including the Government’s own Behavioural Insights Team, whose evidence supported the proposition that a switch from opt-out to opt-in would result in a lower participation rate.

The committee concluded that Clause 10 could have a sizeable negative effect on the number of members participating in political funds and in turn on Labour Party funding. It observed that the question of whether Clause 10 is trade union or party funding legislation is a semantic one. Rather, the more important question is whether it will skew the party funding debate. Clause 10 will have an impact on party funding and is very far from commanding a desirable consensus. It does not deliver what Sir Christopher Kelly sought and the noble Lord, Lord Bew, seeks: that reforms to party funding should be fair and even-handed in their impact.

The committee reached two key conclusions: opt-in will significantly impact on Labour Party funding, and it is desirable that changes affecting the funding of political parties should proceed by consensus. The report acknowledges that the Conservative manifesto committed to an opt-in process. It also notes the Conservative manifesto commitment to seek agreement on a comprehensive package of party funding reform. The committee was disappointed by the Government’s passive approach to this commitment. The overarching view of the committee was that the Government should take the lead and convene cross-party talks with a view to making a renewed and urgent effort to reach agreement. I, for one, sincerely hope that the Government will give that lead and that the other parties will engage positively. Reform is needed to increase public confidence; it needs to be fair in its financial impact on different parties and should not encourage tit-for-tat responses. Otherwise, it will damage our democracy and, importantly, undermine the opposition parties in holding the Government to account. It is the British people who will be the losers.

The Conservative manifesto commits to introducing some form of opt-in but, as the committee reports, the current Clause 10 presents obstacles to the successful implementation of opt-in. It does not make it easy for members; it provides points of friction that discourage opt-in. As Dr Halpern of the Behavioural Insights Team observed, people “go with the friction”. The principle of opt-in is in the Communist—I mean the Conservative manifesto [Laughter]. The detail of the process for implementing it, as set out in this Bill, is not. The greater the obstacles, the greater the impact. Unless the obstacles are mitigated, the extent of the negative impact on Labour Party funding will be greater and even more unfair. The noble Lord, Lord O’Donnell, commented that people will do the simplest thing and that if post is much harder than online, you will not get them doing as much.

The committee looked at three aspects of the opt-in scheme—the transition arrangements; the requirement to opt in on paper, and the requirement to renew an opt-in decision every five years—from a range of perspectives: proportionality, cost to the union and impact. The average political fund contribution is just over 9p per week, and what became increasingly clear was the disproportionate nature of some of the requirements in this Bill in moving to opt-in. The views in the report on the way forward—I stress “on the way forward” because that phrase has not been repeated much—recognise the principle of opt-in going forward but mitigate some of the obstacles and are fairer in what they propose. That is even-handed.

The unanimous and majority views in the report taken as a whole do not breach the principle of transparency of opt-in going forward but, taken together, they restore some fairness, proportionality and even-handedness. That is not something the Government should discard lightly. That would be partisan. This evening, several noble Lords have expressed their surprise at what this committee achieved, which says something about what the members of the committee sought to do to respond to the terms of reference they were given. I hope the Government recognise that and embrace the recommendations in the report.

The House set a task to be completed within a tight timetable. The noble Lord, Lord Burns, was an excellent chair, maintaining patience, forbearance and good humour throughout and, as noble Lords can imagine, good humour was an essential quality in moving the committee to its position. The clerks were an exemplar of the support we as Lords receive. They did not allow speed to prejudice quality, and their drafting skills demonstrated a delicacy and sensitivity most appropriate to the task.